Review of Electricity Customer Switching

Market Review: Completed

Overview

On 10 April 2014, the Australian Energy Market Commission (AEMC) published the Final Report for the Review of Electricity Customer Switching (Review).

The AEMC has found that, generally, customer transfers in the National Electricity Market (NEM) occur in an efficient manner. However, some customers experience lengthy or inaccurate transfers. Such negative experiences have the potential to grow and, more broadly, undermine confidence in the retail market over time.

The Final Report makes several recommendations to the Standing Council on Energy and Resources (SCER) on how the customer transfer process can be made more timely and accurate for customers. The Final Report also sets out an implementation plan, setting out the actions needed to implement the recommendations.

Background

Advice requested by SCER

On 20 June 2013, the AEMC received a request from the SCER to undertake a review of electricity customer switching arrangements in the National Electricity Market (NEM).

The Review of Electricity Customer Switching (Review) would determine if the current switching process is timely and accurate and whether any modifications are required, including having regard to future technologies that may impact on the switching process (such as smart meters).

The review originated from a recommendation made to the SCER by the AEMC in its Power of choice review, for which a Final Report was published on 30 November 2012.

At the time, the Power of choice “Implementation Plan” originally recommended that the AEMC provide advice to SCER on switching arrangements by December 2013.

In July 2013, the AEMC sought a three month extension to this date from the SCER. In August 2013, SCER’s Standing Committee of Officials wrote to the AEMC, agreeing to extend the completion time for the Review to 31 March 2014, nine months after receipt of the Terms of Reference (attached above).

A Final Report, setting out our final recommendations, was provided to the SCER on 27 March 2014, and published on the AEMC’s website by 30 April 2014.

Issues Paper

On 3 December 2013, the AEMC published an Issues Paper – the first of three AEMC papers/reports published under this Review. Interested stakeholders were invited to make submissions on the paper by 24 December 2013. A total of 20 submissions were received.

The Issues Paper set out:

our proposed assessment framework, which would be used to assess alternative options for improving the efficiency of the current customer transfer process and guide the development of our final recommendations;

the current regulatory framework and process for facilitating customer transfers; and

quantitative and qualitative information on actual customer switching times in the NEM.

Options Paper

On 23 January 2014, the AEMC published an Options Paper for the Review. Interested stakeholders were invited to make submissions on the paper by 14 February 2014. A total of 24 submissions were received.

The Options Paper set out a range of (nine) possible options aimed at improving the timeliness and accuracy of the customer transfer process, along with questions for stakeholder comment. The options were developed to address the material issues that were identified in, and responded to by stakeholders in their submissions on, the Issues Paper.